Every problem in the chapter beside the book’s answer, a chapter at a time as you scroll.
Chapter 4: Three Special Stakeholders: Society, the Environment, and Government
16 problems · 0 figures4-1 §4.1 source ↗
Corporations that embrace CSR policies consistently produce a lower rate of return on investment for shareholders.
- a.True
- b.False
Answer
B. False
4-2 §4.1 source ↗
Milton Friedman’s economic philosophy advocates increased government regulation to ensure that corporations are socially responsible.
- a.True
- b.False
Answer
B. False
4-3 §4.1 source ↗
Which of the following is not true?
- a.Shareholder primacy is the clear legal precedent in the United States.
- b.Maximizing shareholder profits is a legitimate goal of management.
- c.Dividends are paid out of corporate profits.
- d.Companies that pursue CSR policies can also be profitable.
Answer
A. Shareholder primacy is the clear legal precedent in the United States.
4-4 §4.1 source ↗
Industries like to be in control of their own destiny and as a result prefer self-regulation to laws imposed by governments. Self-regulation is often ________.
- a.based on external codes of conduct
- b.enforced by the courts
- c.in conflict with common law
- d.less costly for firms than government regulation
Answer
D. less costly for firms than government regulation
4-5 §4.1 source ↗
Identify two benefits for a company following a policy of corporate social responsibility (CSR).
Answer
One benefit is that consumers may prefer to purchase products from a socially responsible company. A second benefit is that CSR may attract more investors, or shareholders, who are interested in investing in the company.
4-6 §4.2 source ↗
What is earth jurisprudence?
Answer
Earth jurisprudence is an interpretation of law and governance based on the belief that society will be sustainable only if we recognize the legal rights of Earth as if it were a person.
4-7 §4.2 source ↗
Which of the following best describes the tragedy of the commons?
- a.People are always willing to sacrifice for the good of society.
- b.People are likely to use all the natural resources they want without regard to others.
- c.The common good of the people is a popular corporate goal.
- d.Tragedies occur when there is too much government regulation.
Answer
B. People are likely to use all the natural resources they want without regard to others.
4-8 §4.2 source ↗
ISOs are sustainability standards for businesses ________.
- a.promulgated by the state government
- b.promulgated by the federal government
- c.promulgated by the World Trade Organization
- d.none of the above
Answer
D. none of the above
4-9 §4.2 source ↗
If environmental harm is discovered, the business entity causing it is frequently held liable by both the government and the victims of the harm in separate proceedings.
- a.True
- b.False
Answer
A. True
4-10 §4.2 source ↗
Which of the following is a potentially effective way to reduce global warming?
- a.build more coal-burning power plants
- b.build more diesel-burning cars
- c.implement a carbon tax
- d.implement tax-free gasoline
Answer
C. implement a carbon tax
4-11 §4.3 source ↗
The law prohibits all executives from serving in senior government posts and then leaving to go back to work for the same company in the private sector.
- a.True
- b.False
Answer
B. False
4-12 §4.3 source ↗
Air pollution is regulated by three levels of government: local, state, and federal.
- a.True
- b.False
Answer
A. True
4-13 §4.3 source ↗
Which of the following is true?
- a.Very few business executives have ever left private jobs to go into government service.
- b.Most government regulatory agencies are funded by donations.
- c.Numerous executives have left Goldman Sachs to go to work for the government.
- d.Few people leave government service to go into the private sector.
Answer
C. Numerous executives have left Goldman Sachs to go to work for the government.
4-14 §4.3 source ↗
Which of the following constitutional provisions gives regulatory power to the federal government?
- a.First Amendment
- b.Tenth Amendment
- c.Commerce Clause
- d.Supremacy Clause
Answer
C. Commerce Clause
4-15 §4.3 source ↗
The Citizens United case________.
- a.upheld existing law limiting spending on behalf of political candidates
- b.overturned existing law
- c.sent the case back to the lower court to be re-tried
- d.created more restrictive limits on political spending
Answer
B. overturned existing law
4-16 §4.3 source ↗
What Amendment was at the center of the Citizens United case? Explain.
Answer
The First Amendment and free speech: The case was a challenge to the federal elections law limiting the amount of money a person or business can spend in support of a political candidate.
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Problems and answers are adapted from Business Ethics by Stephen M. Byars and Kurt Stanberry, OpenStax, and are used under the CC BY-NC-SA 4.0 licence. Access for free at https://openstax.org/books/business-ethics/pages/1-introduction. Illustrations: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license. This adaptation is released under the same licence, is non-commercial, and is neither affiliated with nor endorsed by OpenStax or Rice University.